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Chapter 2 Test Bank
Multiple Choice Questions
1. Philosophers draw a distinction between positive statements, which describe the
world as it is, and ___________________s, which describe how the world should be.
A. normative statement
B. budget constraint
C. trade-off
D. opportunity cost
Answer: A
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Remember
2. Attending college is a case where the ________________ exceeds the monetary
cost.
A. budget constraint
B. marginal analysis
C. opportunity cost
D. marginal utility
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
3. As depicted in _________________________________, it is necessary to give up
some of one good to gain more of the other good.
A. the production possibilities frontier
B. allocative efficiency
C. scarcity
D. utility
Answer: A
Reference:
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Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
Figure 2-1
4. Refer to Figure 2-1. An economy is operating at full employment, and then workers in
the bread industry are laid off. This change is portrayed in the movement from:
A. A to B
B. B to E
C. C to F
D. G to F
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Apply
5. Refer to Figure 2-1. Along the production possibilities frontier, the most efficient point
of production depicted is:
A. Point B
B. Point C
C. Point D
D. All points on the production possibilities frontier are equally efficient.
Answer: D
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Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Apply
6. Refer to Figure 2-1. The most inefficient point depicted is:
A. Point A
B. Point C
C. Point D
D. Point G
Answer: D
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Analyze
7. Why is there scarcity?
A. Because the opportunity set determines this.
B. Because theory dictates it.
C. Because our unlimited wants exceed our limited resources
D. Because human wants are limited.
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Understand
8. Scarcity exists because of:
A. the market mechanism.
B. specialization and division of labor.
C. the allocation of goods by prices
D. unlimited wants and limited resources.
Answer: D
Reference:
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Chapter 2 Test Bank
Multiple Choice Questions
1. Philosophers draw a distinction between positive statements, which describe the
world as it is, and ___________________s, which describe how the world should be.
A. normative statement
B. budget constraint
C. trade-off
D. opportunity cost
Answer: A
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Remember
2. Attending college is a case where the ________________ exceeds the monetary
cost.
A. budget constraint
B. marginal analysis
C. opportunity cost
D. marginal utility
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
3. As depicted in _________________________________, it is necessary to give up
some of one good to gain more of the other good.
A. the production possibilities frontier
B. allocative efficiency
C. scarcity
D. utility
Answer: A
Reference:
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Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
Figure 2-1
4. Refer to Figure 2-1. An economy is operating at full employment, and then workers in
the bread industry are laid off. This change is portrayed in the movement from:
A. A to B
B. B to E
C. C to F
D. G to F
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Apply
5. Refer to Figure 2-1. Along the production possibilities frontier, the most efficient point
of production depicted is:
A. Point B
B. Point C
C. Point D
D. All points on the production possibilities frontier are equally efficient.
Answer: D
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Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Apply
6. Refer to Figure 2-1. The most inefficient point depicted is:
A. Point A
B. Point C
C. Point D
D. Point G
Answer: D
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Analyze
7. Why is there scarcity?
A. Because the opportunity set determines this.
B. Because theory dictates it.
C. Because our unlimited wants exceed our limited resources
D. Because human wants are limited.
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Understand
8. Scarcity exists because of:
A. the market mechanism.
B. specialization and division of labor.
C. the allocation of goods by prices
D. unlimited wants and limited resources.
Answer: D
Reference:
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